The pulmonary alveolar epithelium, which covers >99% of the internal surface area of the lung, is comprised of two types of cells, type I (Tl) and type 11 (Til) cells, both of which are believed to be essential for mammalian life. The current accepted paradigm for cell lineage in the lung is that TH cells are the progenitor cells in the lung, transdifferentiating into Tl cells both in development and in response to lung injury. From both evidence in the literature and recent Preliminary Data, this model does not completely explain more recent experimental observations. Our underlying hypothesis is that alveolar epithelial differentiation, both in lung development and following lung injury, involves more complex pathways than a simple linear progression from the Til to the Tl cell phenotype. The experiments we propose in Specific Aims #1 and #2 will test this hypothesis by fate mapping of irreversibly-marked cells both in development (Aim #1) and following injury (Aim #2). From the studies in Aim #1, we will determine cell fates using transgenic constructs to permanently express EGFP in various cell lineages at different fimes in development. In Specific Aim #3, we will identify gene expression profiles of permanentiy marked cells in different lineages at various times in development, thus characterizing how expression profiles change with progressive differentiation. Using established and novel statistical methods, we will identify candidate regulatory molecules and gene networks. We will test candidate genes with Tl, TH and fetal alveolar epithelial cells in vitro to evaluate promising regulatory genes and networks. The results of these experiments should provide novel insights into alveolar epithelial cell lineage pathways both in development and in lung repair and are likely to identify candidate gene networks that play a role in regulating alveolar epithelial development. The results may provide the basis for developing therapeutic strategies that are testable in vivo. Identification of key pathways and relevant gene networks could lead to the development of novel diagnostic and therapeutic agents.